Structuring Real Estate Multifamily Deals for Outside Investors

Structuring Real Estate Multifamily Deals for Outside Investors

Investor · Brooklyn, NY · Member since 2015 · 5 posts · 1 vote

Hi all,

I have been looking for a standard way to structure a real estate investment for buy and hold deals but have not really found any.  Basically, if i raised money from outside investors for a buy and hold multifamily investment, I would like to know the standard way to structure this type of thing with details about how each person would get paid including the sponsor (me).  

Saving up for my second multifamily is going frustratingly slowly, so i have begun to try to educate myself more on this matter!  Thanks in advance guys

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Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
10y

I've been looking at doing something similar for the past few months. I found 2 webpages that break it down pretty well, including how each person is paid. It should answer most of your questions.

https://www.realtymogul.com/blog/financial-structu...

and

http://www.hmblaw.com/media/10307/raising_20money_...

If you end up doing a deal, I'd love to hear the details and how it turned out. 

Happy hunting

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  • Rental Property Investor · Boston · Member since 2014 · 103 posts · 21 votes
    10y
    Originally posted by @James K.:

    Hi all,

    I have been looking for a standard way to structure a real estate investment for buy and hold deals but have not really found any.  Basically, if i raised money from outside investors for a buy and hold multifamily investment, I would like to know the standard way to structure this type of thing with details about how each person would get paid including the sponsor (me).  

    Saving up for my second multifamily is going frustratingly slowly, so i have begun to try to educate myself more on this matter!  Thanks in advance guys

     Know your audience. Poll your potential investors to see what they're comfortable with. Also, I'd suggest contacting your attorney. They can help you with the rules and regulations for raising money in your state.

  • Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y

    Joint Venture, LLC, or Partnership (be cautious here)

  • Specialist · Scottsdale, AZ · Member since 2014 · 626 posts · 700 votes
    10y
    James Kadar there are people who teach how to do that kind of structuring correctly, legally, and intelligently. Google Joel Block at Bullseye Capital. That is a reputable guy.
  • Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    10y

    I've been looking at doing something similar for the past few months. I found 2 webpages that break it down pretty well, including how each person is paid. It should answer most of your questions.

    https://www.realtymogul.com/blog/financial-structu...

    and

    http://www.hmblaw.com/media/10307/raising_20money_...

    If you end up doing a deal, I'd love to hear the details and how it turned out. 

    Happy hunting

  • Investor · Brooklyn, NY · Member since 2015 · 5 posts · 1 vote
    10y

    thanks for the responses guys. @jack martin I will read up on Joel block, but upon an initial glance he looks very legit.  @sajju shah I like the look of these articles, especially the second one.  Will keep you guys up with anything that is on my mind / if I come across any interesting information in my search 

  • Rental Property Investor · Mineola, NY · Member since 2014 · 838 posts · 212 votes
    10y

    @James K. each structure is based on the deal. I would talk to your potential investors and see which gets the best traction. This is my specialty so if you ever want to get a coffee let me know. 

  • Real Estate Investor · Agoura Hills, CA · Member since 2010 · 55 posts · 66 votes
    10y

    If you would like to discuss this topic, you are welcome to be in touch with me.
    Thanks,
    Joel

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